Published May 2006
people must end
Income-tax filing day has come and gone for another year. This year, it is estimated that Americans will cough up $2.8 trillion dollars in taxes to Uncle Sam, yet it is still not enough to cover the federal government’s bills.
The national debt is $8.2 trillion and growing. Our federal budget shortfall, after Congress and the president are through wrangling, grows between $200 billion and $500 billion each year.
In order to pay for all the spending, the federal government has to borrow. In the past, we’d primarily borrow from ourselves, selling U.S. Savings Bonds. Selling bonds to win World War II was one thing, but borrowing worldwide to pay for our spending spree is quite another matter. We are mortgaging ourselves to our competitors and foreign governments — some of which are not so friendly to the United States.
Government spending is not the only thing out of control. According to the U.S. Commerce Department, consumer spending last December increased at a rate more than double the rate of income growth. This buying frenzy helped push the savings rate for the year down to the lowest level since the Great Depression.
The upshot is that America — and Americans — are up to our eyeballs in debt, and we are leaving our grandchildren with a staggering problem. If we spent that recklessly as children, our parents would have lowered the boom, put us on a painfully tight budget and walked us to the bank to put money in savings for a rainy day or college. Maybe we, the nation’s adults, need a good spanking for what we are doing to our grandchildren.
So why are we doing this? Isn’t the American way to leave our children and grandchildren in a better situation than ours?
First, we need a strong dose of common sense. Simply, we cannot continue to spend beyond our means and borrow to pay for it. One day, the credit card bill will come due.
Second, we need disciplined credit counseling. Somebody needs to slam their fist down on the table and say: “No, you can’t charge it if you can’t afford it. You need to save your money until you can pay for it!”
Third, we need to determine what we need, not what we want or what would be nice to have to keep up with the neighbors next door. The list of wants is endless, but our needs are finite.
Fourth, we have to quit finding ways to have government — which is you and me, the taxpayers — pay for things that people are not willing to pay for themselves. Every time we think of a good idea, we want the city, county, state or federal government to bankroll it.
For example, the Kalakala, a sleek, silver ferry that carried passengers between Seattle and Bremerton from 1935 to 1967, has drifted from Puget Sound mooring to mooring. Nobody wants to dump another private dime into preserving its rusting hull. So, it recently was put on the National Register of Historic Places, allowing its owner to apply for federal grant money in hopes of someday restoring it to its former glory.
I’m not arguing that restoring the Kalakala is a good or bad idea; the question is — is it the best use of our hard-earned tax dollars? Is it worth selling an extra Treasury bill to China or Saudi Arabia to subsidize restoring and preserving an old ferry boat?
Finally, we are a country that wants to have our cake and eat it, too. We are impatient and want it right now. We send people to the Legislature and Congress to bring home the bacon even if it means raising our credit limit or deferring the problem to the next generation — then we complain that the government spends too much money. Somehow, we expect “government money” to magically appear without cutting some other program or raising taxes.
No one wants to run on a platform that is fiscally responsible, because despite all the complaining about high spending, that’s not what voters really want. Try holding a town meeting where you tell your constituents that you will cut their pet programs to ensure government will only provide essential services and therefore, their grandchildren won’t be saddled with our debt. Politicians will get jeered out of the meeting hall.
The Tax Foundation estimates that in 2006, Americans worked until April 26 just to pay their federal, state and local taxes. Think about that. Every penny you earned in the first four months of this year goes to the government to pay your taxes. In fact, taxes are the biggest single financial burden we have, more than housing, health and medical care, and food.
This year, tax freedom day came three days later than it did in 2005, and a full 10 days later than in 2003 and 2004. Can you imagine what it will be in 2020, when many of our grandchildren enter the job market, if we continue to spend money like drunken sailors?
Don Brunell is president of the Association of Washington Business, Washington state’s chamber of commerce. For more information on AWB, go online to www.awb.org.
© 2006 The Daily Herald Co., Everett, WA